Saving Money On Insurance

January 18, 2013

Trustees in Belmont County's Wheeling Township found a way last year to ensure employees have health insurance at a net savings of around $20,000 a year. That may not sound like much until you realize the township has just two employees.

Comparable savings for larger local government entities, some with scores or hundreds of employees, could be a major boon.

Before last year, Wheeling Township paid about $63,800 a year to provide insurance to the two employees and three township trustees. That works out to $12,760 per person.

Eager to save some taxpayers' money, trustees agreed to drop the coverage on themselves. Savings from that move totaled about $38,280 a year.

Then, trustees canceled health insurance the township had provided for the two employees, and instead paid them $2,400 each to help defray the cost of coverage they obtained on their own. In effect, that provided the workers with coverage at a price tag about $20,720 less than if the township had continued providing insurance. Savings amounted to $10,360 per employee.

Seven townships in Belmont County use the same system, while six continue to offer group insurance programs and three do not provide coverage for employees.

Projecting $10,000 in annual health insurance savings for each public employee is a risky calculation, of course. Many factors, including workers' ages and claim histories, go into setting insurance rates. And normally, group insurance programs are less costly per person than policies bought by individuals.

Still, the fact remains that Wheeling Township saved a sizable amount of money for taxpayers. The strategy trustees used there is something other local government officials in both East Ohio and the Northern Panhandle should consider.